Real Estate Revival in Major Indian MetrosInsights from the 360 Realtors Q3 Buyers’

Sentiment Report

Foreword

Investors are once again back into real es-

tate. After visibly moderating sentiments in

the recent times wherein investors preferred

to defer their buying decisions, they have

now started to expand their foothold in the

housing sector.

As per the 360 Realtors Q3 2018 Buyers’

Sentiment Survey, which has scrutinized the

behavior of 4,000 home buyers, currently

around 24% of the purchase decisions are

made with an intention to invest. This is a

major relief to most of the big cities in India

that were suffering from high inventory.

In most of the cities, there is a growing preference for 1 BHK and 2 BHK

units. In Delhi-NCR, upcoming areas such as Dwarka Expressway (DXP)

and Noida Expressway are becoming the new favorite for investors, who are

pouring in, in big volume. DXP is still moderately priced at around INR 6,000-

7,000/ sq. ft., given the fact that the infrastructure is still not completely de-

veloped. However, as litigation over a 150-meter patch has settled down, the

expressway will finally be complete in the next 18-24 months. This will give

a huge boost to infrastructure and commercial activities in the region. As a

consequence, prices will move up sharply. In fact, ascending tendencies are

already visible around DXP.

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

76% 77%

24%

Gurugram Noida Bangalore Mumbai Pune

23% 25% 22%

31%

75%78%

69%

End Use Investment

Investment- End Use Split (Q3 2018)

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

In IT-centric cities such as Pune and Bangalore, investment activ-

ities are again ramping up. Pune is witnessing a strong concen-

tration of investors across its western and eastern peripheries.

With the advent of the IT sector and other industries, peripheries

are aggressively coming up the curve. Moderate property prices

are further incentivizing investment. Bangalore is also demon-

strating healthy investor activities in numerous upcoming loca-

tions in the northern, eastern and south-eastern parts of the city.

By the end of 2017, the Mumbai Metropolitan Region (MMR)

had a huge inventory overhang of around 350,000 units. How-

ever in 2018, with end user and investment activities picking up,

there has been a gradual reduction. Apart from 2 BHK, investors

are also pivoting towards smaller 1 BHK and studio units. As

prices of 2 BHK (and above) are exorbitant in prime locations of

the city, many buyers are opting for smaller units in the periph-

eries. Of late, the city is also witnessing a lot of micro-homes

especially in the western suburbs such as Andheri, Borivali and

Dahisar. These matchbox-sized apartments (300-400 sq. ft.)

come at a price of around INR 55-70 lacs and are hence seeing

a lot of uptake.

Uptick in the economic activities, increased

transparency across the transactional cycles

and growth in new corridors are rendering

a positive boost to investor sentiments in

the country. Not to forget the fact that the

developer fraternity is also coming up

with numerous attractive and

risk-adjusted schemes such

as deferred payment (pay

the booking amount and

EMI post-possession),

assured rentals, and

construction-linked

plans to further lure

the investors.

Ankit Kansal Founder and MD, 360 Realtors

Delhi-NCR Region Budget Wise Split of Investors - Delhi NCR (Q3 2018)

Dwarka Expressway Becoming the

New Hot Favorite

Investment sentiment continues to improve grad-

ually in Delhi-NCR (Gurugram, Noida, Delhi, etc).

As per the consumer survey by 360 Realtors,

slightly less than one-third of the investments into

Delhi-NCR is directed towards smaller units which

are priced at less than 40 lacs. Slightly more than

40% of the investors are putting their capital into

properties in the range of INR 40 and 80 lacs,

making it the most popular price bracket.

In terms of configurations, around half of the investments are directed to-

wards 2 BHK units, making it the most preferred segment amongst the in-

vestor fraternity. The propensity towards 2 BHK could be explained on the

basis of rising popularity for such units amongst young families. Also, 2 BHK

units are emerging as an economical alternative to larger 3 BHK units.

Investor interest in Delhi-NCR is also backed by attractive schemes by devel-

opers. Major developers are coming up with attractive plans wherein one has

to pay a booking amount upfront (roughly 25-30% of the ticket size) and then

pay the EMIs post-possession. This makes investment very convenient as

investors can park a small amount of capital and then wait for a while without

any downside risk involved.

< INR 40 Lacs

INR 40-80 Lacs

INR 80 Lac-1.5 Cr

> 1.5 Cr

9%

31%

41%

19%

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

Dwarka Expressway in Gurugram is one of the major attractions for investors

within the region. On 19th November, our Honorable Prime Minister Narendra

Modi inaugurated the Dwarka Expressway (DXP). It is believed that in next

18-24 months, the expressway will be fully operational, thereby giving expo-

nential propulsion to the demand in the region. Currently, prices at Dwarka

Expressway are roughly going at INR 6,000-7,000/ sq. ft. However, the de-

velopment of the expressway will also be associated with a huge amount of

infrastructure development in the region, thereby leading to significant price

growth. In the next 24 months, prices can reach up to INR 9,000/ sq. ft.,

which will pique a lot of investor interest in the market.

47%

30%

23% 2 BHK

3 BHK and Above

1 BHK/ Studio Apartment/ Micro Home

Mumbai Metropolitan Region

Sentiments Reviving in the Biggest Real Estate

Markets

By the end of 2017, MMR was suffering from a large inventory

overhang. Studies by Knight and Frank have suggested that the

total unsold inventory in the entire region was roughly to the tune

of around 350,000. However, sometimes distresses in the market

can be a precursor to new emerging trends. Due to high inventory

overhang, property prices either remained stable or got correct-

ed. This has eventually vitalized more investment activities in the

market.

Developers are now also catering to the growing shift in investment

pattern towards affordable ticket sizes that form a major portion

of the existing demand dynamics. 360 Realtors’ Consumer Sen-

timent Survey further illustrates this trend with inputs suggesting

that 38% of investors are buying homes that lie within the 40-80

lacs bracket. These affordable projects are based in upcoming

locations such as Navi Mumbai, Thane, Kalyan and Mira Road.

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

Unit Wise Split of Investors - Delhi NCR (Q3 2018)

Budget Wise Split of Investors - MMR (Q3 2018)

38%

28%

19%15%

< INR 40 Lacs INR 40-80 Lacs INR 80 Lac-1.5 Cr > 1.5 Cr

In terms of configurations, the two most popular configurations that are

driving the market in MMR are 1 BHK and studio apartments, followed

by 2 BHK homes. As affordability is still a challenge in Mumbai, many de-

velopers are coming up with smaller units that can fall within the budget

of the average middle income buyer. For instance, if we look at the west-

ern suburbs, an average 2 BHK apartment will probably start at ~ 1.3

crore - a price proposition that is far from the idea of being affordable. On

the contrary, a micro-home or a studio (roughly 350-450 sq. ft.) will come

at a budget of around 55-70 lacs.

Interestingly, a small but sizable num-

ber of investors (15%) in MMR are also

pouring their capital into projects that

are priced less than 40 lacs. Although

such a proposition is nearly impossible

in Mumbai city, there are some upcom-

ing areas such as Nerul, Kalyan, Am-

bernath and Badlapur, mostly located

across the peripheries, where a ticket

size of less than 40 lacs is possible.

1 BHK/ Studio Apartment/ RK 2 BHK 3 BHK and Above

48%

36%

16%

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

Unit Wise Split of Investors - MMR (Q3 2018)

Bangalore is a city where the real

estate market is largely influenced

by working professionals drawn to-

wards small yet attractive accom-

modations. The city, which is also

touted as the Silicon Valley of India,

consists of a large young working

population, mostly employed in the

IT/ ITeS sector. Interestingly, even

during the time of demonetization,

the overall sentiments in the Banga-

lore market did not taper off com-

pletely and the investor class contin-

ued to remain active in the market.

As per 360 Realtors’ survey results, investors in the city are leaning to-

wards parking their hard-earned money in purchasing homes that are

easy on the budget, yet big on amenities. Interestingly, the city has plen-

ty of large-scale projects with a battery of top-notch facilities and amen-

ities. The city is also witnessing the arrival of townships in upcoming

locations in the northern, eastern and south-eastern regions of the city.

As per the survey results, around 40 percent of customers are leaning

towards the 40-80 lacs segment. This is closely followed by the less

than 40 lacs segment. The administration’s efforts to ensure compli-

ance with regulatory and environment standards have also resonated

well with prospective buyers. For instance, the government’s decision to

make rainwater harvesting and effective waste management processes

mandatory are also pushing demand.

Bangalore

Bangalore Real Estate Market Emerging

as a Long-Distance Contender

< INR 40 Lacs

INR 40-80 Lacs

INR 80 Lac-1.5 Cr

> 1.5 Cr

33%

40%

15%

12%

Budget Wise split of investors - Bangalore (Q3 2018)

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

In terms of size, the core category that has

emerged to be extremely popular amongst the

widespread investor base is the 1BHK/ studio

homes segment. The growth in this category is

propelled by the high prospective returns. Add-

ed to that is the fact that these properties also

offer a lower burden in terms of maintenance

expenditure. Many such properties also feature

swanky configuration options which are making

them a hit amongst both single individuals as

well as young working couples.

Going forward, apart from end users, the Indian

Silicon Valley will continue to draw investor inter-

est. In the northern parts of the city, locations such

as Devanahalli, Yelahanka and Hebbal will reinvig-

orate a lot of demand. In the eastern parts of the

city, prominent IT-centric locations such as Hoskote,

Whitefield, and Budigere will feature on the investor

radar. However, as many such markets have started

to saturate, as a spillover effect, numerous IT com-

panies are now shifting towards the south east of

the city in locations such as Sarjapura Road. Conse-

quently, investment activities are also picking up fast

around the IT corridors of the south east.

40%

30%

30%

1 BHK/ Studio Apartment/ RK

2 BHK

3 BHK and Above

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

Unit Wise Split of Investors - Bangalore (Q3 2018)

PuneA Goldmine for Investors

Pune has come a long way to

become one of the most pre-

ferred investment destinations

in the country. Once known to

be a distant cousin of Mumbai,

the city has now carved its own

niche on the back of prolific IT/

ITeS, automobile and education

industries.

Investment activities took a beat-

ing during the implementation of

demonetization and GST. How-

ever, real estate markets in Pune

have once again jacked up. Like

its cousin Mumbai, Pune is grow-

ing vigorously across its periph-

eral areas due to robust growth

in manufacturing and service

sectors.

< INR 40 Lacs

INR 40-80 Lacs

INR 80 Lac-1.5 Cr

> 1.5 Cr

On the western peripheries of the city, Pimpri Chinchwad and other

adjoining areas are emerging as the new investment hubs. Loca-

tions such as Pimpri Chinchwad, Wakad, Baner, Hinjewadi which

were unheard of until some time ago are now the new favorites of

both investor and end user fraternity. Due to large IT and automobile

catchments, these place are witnessing huge end user concentra-

tion, which in turn is feeding into investment activities. The western

peripheries of Pune are also connected to Mumbai via the Mum-

bai-Pune Expressway. As a result, in recent times, investment inflow

from Mumbai has also ramped up. Given the fact that property prices

in Mumbai have risen to large levels, Pune offers an economical alter-

native to investors looking out for prudent choices.

47%

12%

6%

35%

Budget Wise split of investors - Pune (Q3 2018)

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

Likewise in the eastern parts of the city, numerous upcoming locations such

as Kharadi, Wagholi and Undri are also rising up on the investor radar due to

burgeoning IT parks in the areas. In terms of budget-wise preferences, the

40-80 lacs bracket continues to be the favorite as around half of the inves-

tors have shown their willingness to invest in such properties. There is ample

demand in Pune for small ticket size investments as well.

In terms of configuration-wise preferences, around 40% of the investors are

parking their capital in 2 BHK units. Interestingly, there is significant interest

in 3 BHK units as well, which puts Pune in stark contrast with other metros in

India where the demand for 3 BHK is relatively low. The ticket size of 3 BHK

in Pune is also low when compared to other cities, which further explains the

rise in investor interest.

29%

39%

32%

1 BHK/ Studio Apartment/ Micro Home

2 BHK

3 BHK and Above

(Sou

rce:

360

Rea

ltors

’ Sur

vey)

Unit Wise Split of Investors - Pune (Q3 2018)

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